SOLUTIONS TO THE FIVE KEY BROWNFIELD VALUATION PROBLEMS
||Adair, Alastair; Stanley McGreal; Bruce Weber
||SOLUTIONS TO THE FIVE KEY BROWNFIELD VALUATION PROBLEMS
||Book of Abstracts: 13th Annual European Real Estate Society Conference in Weimar, Germany
||A clear statement of the paperís objectives and subject matter: The objective is to solve the five problems that a German and US bilateral working group concluded need to be solved for successful brownfield redevelopment. An assessment of the originality of the paperís contribution to the specific field involved: The contribution of these solutions to the field of brownfield redevelopment are based on the authorís doctoral thesis, the first effort found to integrate the scientific process into the appraisal process to solve the problems of redeveloping contaminated land. An outline of the methods used and proposed application or theoretical contribution: The method used was to search literature from a variety of disciplines that were said to be essential (by those actively involved in brownfield redevelopment) in providing the analysis requisite for brownfield redevelopment to be successful. The theoretical contribution is the application of scientific methods from these disciplines in conjunction with methodologies use in the U.S. Triad process within a valuation model in order to quantify the previously unquantified uncertainty that has precluded brownfield redevelopment. Empirical data is also included that reveals the errors that result can from the use of conventional valuation methods. An overview of key conclusions or proposed conclusions: The current valuation methodology for brownfields is seriously flawed. A panel of 30 practitioners actively involved in brownfield remediation have agreed that it is absurd to use one contaminated site to infer remedial time and cost (for all but the simplest soil contamination) for another contaminated site-especially without understanding conceptual site models for all of the sites. This conclusion is a result of the heterogeneneity of subsurface soils. A combination of discrete choice modelling and Bayesian econometrics should be used in conjunction with Monte Carlo methods to quantify the uncertainty of the reversionary value and sustainability of the redeveloped property. GeoBayesian methods should be used when soil contamination is found in order to statistically quantify the amount and spatial extent of contamination and stochastic inverse methods should be used to probabilistically quantify remedial time and cost when an aquifer has been contaminated.
||Brownfields; valuation; Monte Carlo; remedial investigation; feasibility studies Kriging; Bayesian analysis; market analysis; forecasting; risk measurement
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